US to 'wind down' AIG in 'orderly way': Geithner

US Treasury Secretary Timothy Geithner said that the government would work with AIG chief executive Edward Liddy to "wind down" the troubled insurer "in an orderly way."

In a letter to lawmakers Geithner addressed what he described as "considerable outrage" stemming from 160-million-dollar bonuses paid to AIG top executives, and said his department would "explore any and all responsible ways to accelerate this wind down process."

He said he would "work with" AIG chief executive Edward Liddy "on measures to wind down AIG in an orderly way and protect the American taxpayer."

AIG, which received billions in US bailout funds, is also to pay back the government for the hefty bonuses shelled out to top executives, Geithner said.

Geithner's statement comes as revelations about the staggering bonuses which were awarded to employees of the giant US insurer fueled a political firestorm.

The controversy engulfing bailed-out American International Group threatened to turn nasty amid reports of death threats against AIG workers, and posed a critical test of President Barack Obama's economic revival plans.